Duterte shouldn't wreck the party he crashed

The Philippines' President Rodrigo Duterte remains popular, but his coarse tongue and take-no-prisoner methods are making investors jittery.

One of the more bizarre commentaries I've read on Philippine President Rodrigo Duterte's administrative style and nation-building approach was one comparing him with Singapore's late Mr Lee Kuan Yew.

Writing in the Philippine Star, Professor Emmanuel Lopez, who chairs the economics department of the University of Santo Tomas, recently argued that the new Philippine leader's strategy was rather like Mr Lee's own in the initial years when he worked strenuously to rid the island state of corruption and crime.

According to Prof Lopez, this spurred growth in investments and social development. "The current government may initially encounter rough sailing due to criticism but, as long as programmes and campaigns are carried out in the most transparent and moral way, the President can be assured of the support of the 16 million people who installed him to power, as well as those who see the positive achievements of his government," he wrote about his country.

The analogy would have been interesting except that it is laughably inappropriate. Mr Lee, for one thing, tough as he was on crime, was not a man to have a person's life taken away without absolute attention to due process. Nor would he, favourable arbitral ruling in hand, ever back away from pressing his principled claim to national territory for the elusive promise of a few bags of silver in development aid.

Just look at the Singapore envoy to Beijing's recent exchanges with the editor of Beijing's Global Times: A heat map would show that Singapore is the Asean economy most exposed to China. Yet, this has not stopped the Republic from asking Beijing to respect international law, even as it is not a party to the South China Sea dispute and many would consider it prudent to stay silent on someone else's problem.

The early 20th-century US scholar Hans Morgenthau, a pillar of the realist school of international politics, taught that national interests predominate in foreign policy. But principles do matter as well. Aside from the fact that Mr Lee and Mr Duterte were both trained as lawyers, there is nothing in common between them.

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The Duterte-ordered extrajudicial killings, and his gyrations on the maritime dispute with China, have raised a stench for the Philippines that is far more perverse than the haze that used to spread out from Indonesia. If it goes on for too long, it could potentially be a bone in Asean's throat. Remember, next year, the Philippines is chair and host of the Asean summit as the 10-nation grouping celebrates an important milestone: its 50th anniversary.

The sharp-tongued President is still wildly popular in the nation. But as the weeks pass, opposition will surely grow. The military, despite his promises of higher salaries and Glock pistols to officers, may only have so much patience with a man bent on attacking strategic structures built up over years.

In the three months since Mr Duterte was installed, the number of killings has soared to pass 3,500. Mr Ronaldo de la Rosa, the Philippine police chief who is also known as "Bato" or Rock, counts some 1,500 killed in police operations against illegal drugs, while the rest are said to be murders by unknown assailants that are under investigation.

From Davao, where the method of rubbing out junkies and pushers was perfected, the killings have reached the national capital and elsewhere.

Worse, and this is common in every society where extrajudicial methods have been attempted to speed up the system of delivering justice, there is evidence of mounting abuse of the process. People with no links to the drug trade, either as consumers or suppliers, have been assassinated in the process, perhaps to settle private vendettas. Criticism is met with abuse. An army of online warriors, some of whom are perhaps employed in the booming outsourcing industry, seem to be readily on hand to troll presidential critics, putting a fright into even seasoned commentators.

If the stated aim of all this is to create an environment salubrious for swifter economic growth, Mr Duterte may, to his dismay, find things actually going the other way. Indeed, having crashed the Manila party as the unheralded outsider, he may now be the man to wreck it. That would be a monumental pity.

The previous administration, led by Mr Benigno Aquino III, has bequeathed him one of Asia's fastest-growing economies at a time when global and regional economic expansion has been sluggish. Gross domestic product increased 7 per cent in the three months through June from a year earlier, the fastest pace since the same period in 2013. Services, the largest chunk of the economy, expanded 8.4 per cent in the second quarter from a year earlier, while industrial output rose 6.9 per cent. Consumer spending climbed 7.3 per cent and government expenditure surged 13.5 per cent. That's a pretty enough picture. Mr Duterte's first instinct should be to not drop the ball.

Instead, global investors have turned skittish in recent weeks as his coarse tongue and take-no-prisoner methods get attention. The peso is at seven-year-lows and is Asia's worst-performing currency lately. Investors have been pulling money out of the country's stock markets for the past month, reallocating the funds to Jakarta and Mumbai.

"In the United States, as elsewhere, private investors have reportedly grown skittish about the Philippines' prospects," Mr Dindo Manhit, president of the Stratbase-ADR Institute for Strategic and International Studies, told the Business Mirror newspaper recently. "The US economy is the Philippines' largest source of private investment and second-largest export market after Japan."

Meanwhile, global nickel prices have been wobbling since Mr Duterte's Secretary for the Environment, Ms Gina Lopez, who has an activist background, got charge of the ministry. The country is the world's top miner of nickel ore and Ms Lopez has vowed to shut down companies that fail to meet environmental and welfare standards. Ten mines have been suspended so far and more may be forced to shut down.

The sharp-tongued President is still wildly popular in the nation. But as the weeks pass, opposition will surely grow. The military, despite his promises of higher salaries and Glock pistols to officers, may only have so much patience with a man bent on attacking strategic structures built up over years. Some of the sheen on the economy will fade through no fault of Mr Duterte's - massive government spending in the run-up to elections helped boost first-half growth. Low oil prices, if they persist, will hurt the remittances from Gulf states on which many families survive.

Besides, analysts believe that, for the Philippines to sustain economic expansion of 7 per cent, the investment rate would have to move from its current 25 per cent to as much as 40 per cent. That will need significant participation from foreign capital, which may turn squeamish if Mr Duterte insists on continuing to display his flintiest edges.

Mr Duterte has many good reasons to be in a hurry to accomplish his mission. Presidents in his nation are allowed only a single six-year term, after all. Sometimes, though, it is wise to make haste a tad slowly.

The Straits Times

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